Healthcare policy today is driven by concern for those increasing costs while at the same time medical outcomes are under increasing scrutiny. FIG. 1 plots the growth of healthcare expenditures as a percent of gross domestic product from 1960 to 1998. Note first that the healthcare expenditure proportion of GDP has grown from about 5% to 13.5% over the 38 year period. Double-digit growth of health expenditure in the 70's and 80's resulted in this rather steep portion of the curve, and the health expenditure as a proportion of GDP has been stable for the past six years, around 13.5%. This is due to a marked slowing of the health expenditure growth to about 4-5% per year as well as a growing gross domestic product. However, despite a stable percent over the past five years, in 1996 the national health expenditure moved over a trillion dollars with a 400 billion dollar growth since 1990. Thus, healthcare expenditures remain quite a concern.
At the same time that costs were rising dramatically, some outcome measures appeared to be reaching plateaus. FIG. 2 is a plot of life expectancy in relationship to per capita income, published in February in “Science” by David Bloom at the Harvard School of Public Health. This is an international comparison. Per capita income is generally a surrogate for total healthcare expenditure and, as can be seen, life expectancy seems to plateau with higher levels of spending. Certain other gross outcome measures, such as mortality and infant mortality, while falling, do not seem to be falling at the same rate as cost increase. This has led some policy makers to question the “value” of increased expenditure.
Health value, in this sense, is defined as the ratio of health outcomes divided by health expenditures or health outcomes divided by the cost per service times the volume of services. The numerator, that is health outcomes, will be the subject of other papers on quality and its determinants, but attempts to control and reduce the denominator have essentially led to the topic discussed herein.
First, attempts to control price failed in the 70's as it was impossible to stifle basic economic laws. Efforts to limit services by regulating capital expenditures through the determination of need process in the 80's similarly did not control the volume of services. Other mechanisms to control volume then followed. Second opinions came and went, but defining certain services as unnecessary and, therefore, not covered continues as a major technique today.
It would be convenient if all services could be clearly defined neatly into universes of necessary and unnecessary services, but they cannot. Referring to FIG. 3, Panel A reflects the unrealistic notion that services can be simply defined as (i) unnecessary assuming they are harmful or have no or minimal benefit, or (ii) necessary, assuming they have moderate or marked benefit. Reality is reflected in Panel B, where the universe of services are arrayed in a continuum of benefit with a few that are harmful to those that carry no effect to those that are minimally, moderately, or markedly effective. Low yield is not no yield.
In the terms defined herein, many services are marginally useful. For example, CAT scan will pick up a rare malignancy presenting as a headache, and a thallium stress test is 8-10% more sensitive than an exercise tolerance test alone in discovering an ischemic cause for atypical chest pain. Yet, many of today's insurance plans force an unnatural choice where decisions are made by administrative fiat or by a panel of physicians or ultimately by the court. This is a suboptimal approach to medical service distribution.
The current effort to control the volume of services relies upon a mechanism that combines the financing and the delivery of services into a single unit that includes the physician, placing economic risk upon the physician. These systems encourage the physicians to limit marginally useful services in the interest of efficiency, in the interests of the health plan, or on behalf of the remainder of their own insured panel. While such “reversal” of the economic incentives may be successful, these systems threaten the physician-patient relationship, particularly when global budgets are under increasing pressure in a competitive model.
Now described is one anecdote from the inventor's own experience and several quotations to describe the impact of this system of resource management. “I received a call from a high school classmate about fifteen years ago who I had not heard from about 10 years before that. He told me that he was just diagnosed with Hodgkin's Disease and he was concerned that his health plan might not do everything possible for him. I was supposed to reassure him that his own physicians were primarily concerned with his well-being. This apparent sense of mistrust between my classmate and his healthcare providers starkly foretold our concern for the disruption in physician-patient advocacy so evident today.”
Victor Fuchs, Ph.D., in a 1984 “Sounding Board” article said, “Low yield medicine is not no yield medicine For physicians to have to face these tradeoffs explicitly every day is to assign an unreasonable and unbearable burden.” Norman Levinsky, M.D., former Chairman of Medicine at Boston University, in a “Sounding Board” article wrote, “when practicing medicine, doctors cannot serve two masters. It is to the advantage of both our society and of the individuals it comprises that physicians retain their historic single-mindedness. The doctor's master must be the patient.”
Finally, a recently retired Editor-in-Chief of the “New England Journal”, Jerome Kassirer, M.D., in a 1998 editorial wrote, “If we capitulate to an ethic of the group rather than the individual, and if we allow market forces to distort our ethical standard, we risk becoming economic agents instead of healthcare professionals. Inevitably, patients will suffer and so will the noble profession.”
As we have seen, society has made it plain that we have reached the limit of resources that should be allocated to healthcare, and many people and business concerns wish to reduce the healthcare expenditure from its present levels.